results 2014 - marketscreener.com filefx headwind from latam currencies. fcf at €47m above 2013...

RESULTS

2014 MADRID, FEBRUARY 27TH 2015

www.indracompany.com

http://www.indracompany.com/

2 www.indracompany.com

CONTENTS

1. Introduction 3

2. Main Figures 7

3. Analysis by Segment 8

4. Analysis by Vertical 9

5. Analysis by Geography 12

6. Analysis of the Consolidated Financial Statements (IFRS) 14

7. Other events over the period 19

8. Events following the close of the period 20

ANNEX 1: Consolidated Income Statement 21

ANNEX 2: Income Statements By Segments 22

ANNEX 3: Consolidated Balance Sheet 23

ANNEX 4: Consolidated cash Flow Statement 24


1. INTRODUCTION

MAIN MILESTONES

Indra’s revenues increased by +5% in local currency, increasing in all verticals. Backlog

totaled €3,473m, with double digit growth in order intake in AMEA and Latam.

Recurrent operating margin reached 6.9%; free cash flow (1) generation reached €47m.

Net profit of -€92m, as a result of provisions, impairments and non recurring items from

changes in estimates for a gross amount of €313m in projects, intangibles, goodwill and

tax credits.

At the end of June, the company will host an Investor’s Day to outline its strategic lines,

operating plans and medium term financial indications.

2014 RESULTS

Revenues in 2014 grew +5% in local currency

Revenues reached €2,938m, growing +5% in local currency, despite the macro

environment in some countries, especially in the last part of the year. Reported growth

was +1% mainly due to Latam FX headwind.

Order intake grew +4% in local currency.

Order backlog reached €3,473m (+3% in local currency), representing 1.2x LTM revenues.

Out of this backlog, €1,400m are to be executed in 2015.

Good performance in all geographies

The actively in Spain has stabilized (flat) after four years of decline (more than 10% in the

last two years), with positive contribution from public clients. Order intake in Spain had a

good start of the year.

Order intake and sales have increased at double digit growth rates in local currency

(despite macro deterioration in Brazil).

Double digit growth in AMEA in order intake and backlog in local currency, as well as

consolidating sales levels (€375m).

Better than expected performance in Europe & North America: +6% in local currency.

Pressure on operating margin continues

Ongoing pricing pressure and non optimal cost base in Spain.

Execution problems in certain projects in Latam and especially in Brazil.

Commercial efforts to facilitate the entering in new markets (mainly in AMEA).

FX headwind from Latam currencies.

FCF at €47m

Above 2013 levels, but below company’s target (€100m).

Impacted by lower operating profitability, longer execution times for some projects, and

delays in starting others which has implied delays in collecting down payments to 2015.

Non-recurring items in 2014 with almost no impact in financial position

Provisions, impairments and over costs in projects due to programs delays, re-schedules

and cancelations, as well as changes in estimates as a result of events or litigious

situations concurred in the last part of 2014 and beginning of 2015:

o Inventories -€139m

o Clients -€65m

o Onerous projects -€27m

Total -€231m

Goodwill impairment (-€21m: -€17m in Brazil and -€4m Indra Business Consulting).

1 Free cash flow is defined as cash generated before dividend payment, net financial investments and similar payments, and investment in treasury stock


OPERATING PROFIT AND NET PROFIT

Recurrent EBIT reaches €204m (-10%).

Recurrent EBIT margin of 6.9% (versus 7.8% in 2013), below company’s expectations at

the beginning of the year.

Spain: Price pressure continued through the year 2014, without recovery signals,

driving profitability slightly below expectations. Production costs adjustment process

continued through the year.

Latam: Expected improvement in profitability, backed on the second half of the year,

has not taken place. Worse than expected performance in Brazil and Chile, and better

in Argentina. Latam remains as the region with the lower profitability. Additionally,

Latam FX headwind has impacted group operating margin.

Europe & USA: profitability improves in the year and continues being the highest

within the group, despite declines in the last quarter due to the ending of some

projects.

AMEA: reduces profitability versus previous year mainly due to project mix. Due to

the delay in launching some projects awarded in the last quarter, the area does not

reach expectations for the year.

During the last quarter the company has made a number of non-recurring items impacting

EBIT by a gross amount of €294m, which net of the reversion of provisions stands at

€246m, detailed later in this report. After such elements, EBIT drops to -€42m.

Recurrent Net Profit (before non-recurring adjustments) has been €104m, -24% versus

2013.

Net Profit (reported) for the year is -€92m, after the impact of the non-recurring items.

CAPEX AND NET WORKING CAPITAL EVOLUTION

Net working capital has reached 106 DoS excluding the impact from the non recurring

items (write off in inventories and the increase of provision for doubtful accounts), that

compares with 109 DoS in 2013.

Net working capital totaled 81 DoS including these non-recurring elements.

The improvement in the net working capital in Spain has not compensate the weak

performance in Latam and delays in the collection of certain down payments:

In Spain, Spanish Public Administrations has decreased its debt levels as a result of

the execution of the plan to regularize pending payments to suppliers in 1Q14 and

the improvement in the payment terms of several Regional Governments.

In Latam, problems in execution and delays in the collection of certain projects at the

end of the year, mainly in Brazil and Mexico, has been the main causes of the

underperformance of the area.

Delays in the launching of certain projects with a relevant prepayments component,

which are expected to collect in 2015.

Net material and immaterial investments reached €57m (€42m immaterial and €15m

material), in line with company expectations. Net financial investments totaled €13m (net

of divestments and the consolidation of the temporary joint enterprises).


FREE CASH FLOW EVOLUTION

The generation of free cash flow in 2014 has reached €47m versus €52m in 2013 (€27m

excluding the impact from the divestments made in 2013).

This cash flow is below the guidance stated by the company at the beginning of 2014

(€100m) as a result of the weaker performance of the net working capital, lower

operating margins and higher tax payments.

100 22

25

137 47

FCF Guidance Net Working

Capital

EBIT Taxes Capex FCF 2014

Net debt at the end of the quarter has reached €663m (€622m in 2013), representing

2,5x net debt to recurrent EBITDA of the last twelve months and considers the ordinary

cash dividend of €0.34 per share over 2013 results.

The elements affecting the evolution of the net debt are the following:

622

184

17 4457

53

20

5612

663

Net Debt 2013 Operating Cash

Flow

Net Working

Capital

Other Operating

Changes

Taxes Capex Financial

Investments +

Treasury Stocks

Dividend Non-CF items Net Debt 2014

FCL = 47 M€


2. MAIN FIGURES

(1) Before non recurring items

(2) 2013 FCF adjusted for the impact of the disposal of the business of advanced management of digital documentation

were €27m

Basic EPS is calculated by dividing net profit by the average number of outstanding shares

during the period less the average treasury shares of the period.

Diluted EPS is calculated by dividing net profit (adjusted by the impact of the €250m

convertible bond issued last October 2013 with a conversion price of €14.29), by the

average number of outstanding shares during the period less the average treasury shares of

the period, and adding the theoretical new shares to be issued once assuming full conversion

of the bond.

The average number of shares used in the calculation of the EPS and dilutive EPS for

treasury shares, total number of shares, and theoretical shares to be issued related to the

convertible bond, are calculated using daily balances.

At the close of the period, the company held 202,199 treasury shares representing 0.12% of

total shares of the company.

INDRA 2014 (€M)

2013 (€M)

Variation %

Reported/Local Currency

Order Intake 3,013 3,029 (1) / 4

Revenues 2,938 2,914 1 / 5

Backlog 3,473 3,493 (1)

Recurrent Operating Profit

(EBIT) (1) 204 226 (10)

Recurrent EBIT margin (1) 6.9% 7.8% (0.9) pp

Non recurring items (246) (28) 783

Net Operating Profit (EBIT) -42 198 (121)

EBIT margin -1.4% 6.8% (8.3) pp

Recurrent Net Profit (1) 104 138 (24)

Net Profit -92 116 (179)

Net Debt Position 663 622 6

Free Cash Flow (2) 47 52 --

Earnings per Share (according to IFRS)

2014 (€)

2013 (€) Variation %

Basic EPS -0.561 0.706 (179)

Diluted EPS -0.477 0.697 (168)

Recurrent diluted EPS (1) 0.604 0.830 (27)

2014 2013

Total number of shares 164,132,539 164,132,539

Weighted treasury stock 282,131 93,096

Total shares considered 163,850,408 164,039,443

Total diluted shares considered 181,345,160 167,682,186


3. ANALYSIS BY SEGMENT

SOLUTIONS

2014 2013 Variation %

€M €M Reported

Local

Currency

Order Intake 2,029 1,988 2 6

Revenues 1,887 1,888 (0) 4

Book-to-bill 1.08 1.05 2

Backlog / Revs

LTM 1.38 1.34 3

Revenues have increased by +4% in local currency (flat in reported figures), which

represents 64% of the company’s total sales. All geographies have reported positive growth

in local currency (almost flat in AMEA). The activity in Spain has stabilized (+1%), improving

its performance versus previous years (-15% in 2013).

By verticals, it is worth to highlight the performance of Financial Services (with double digit

growth) followed by Security & Defence, Public Administrations and Transport & Traffic (with

low to mid single digit growth rates).

Order Intake was 8% above sales, increasing +6% in local currency (+2% in reported terms)

as a result of the positive performance in verticals such as Financial Services, Transport &

Traffic and Public Administrations. By regions, it is worth to spotlight Spain (with double digit

growth rates and a significant contribution from the verticals of Transport & Traffic and

Defence) and AMEA.

Order Backlog stood at €2,599m, which represents an increase of +3% in reported term. Book to

bill ratio has increased by +3% to 1,38x (vs 1,34x in 2013).

SERVICES


€M €M Reported

Local

Currency

Order Intake 984 1,041 (5) (0)

Revenues 1,051 1,026 2 7

Book-to-bill 0.94 1.01 (8)

Backlog / Revs

LTM 0.83 0.94 (12)

Revenues have increased by +7% in local currency as a result of the positive evolution of

the activity in all geographies with the exception of Europe & North America (with a very low

weight in revenues). Factors such as the concentration of the international activity in Latam

and the currency headwinds in most of the countries of the area negatively impacted the

reported figures (+2%).

Order Intake remained flat in local currency (-5% in reported terms) affected by the

weaknesses in the verticals of Telecom & Media and Energy & Industry.

Order Backlog decreased to €874m, representing 0.83x LTM sales as a consequence of the

execution of multi-year projects contracted in previous years.


4. ANALYSIS BY VERTICAL

REVENUES 2014

€M

2013

€M

Variation %

Reported Local

Currency

Energy & Industry 473 479 (1) 3

Financial Services 485 470 3 9

Telecom & Media 322 355 (9) 2

PPAA & Healthcare 529 503 5 7

Transport & Traffic 620 611 1 5

Security & Defence 509 495 3 3

TOTAL 2,938 2,914 1 5

The activity in Energy & Industry vertical has increased by +3% increases in local currency (or

-1% in reported terms).

Indra keeps its very strong positioning among key clients in the Energy sector, both at the

domestic and international market.

Proprietary Solutions remains its consolidation pace in the areas of Industry & Consumption

in Spain, especially in sectors such as Hotels, Airlines and Energy (commercial systems,

efficiency, etc.).

The levels of activity in Latam remains strong (double digit growth rate in local currency),

based on the solid trend of Indra’s proprietary Solutions for the Electricity and Oil markets.

Sales in Financial Services vertical has increased by +9% in local currency, or +3% in euros.

The activity in Spain is performing very well (+7%), with positive growth rates in the Banking

and Insurance business.

New business opportunities are emerging in the Banking sector in Spain (especially in

Consultancy, BPO and Outsourcing), which may accelerate in the following quarters.

Revenues in Latam, where the activity remains based on the Services segment, has

registered double digit growth rate in local currency.

It is worth to highlight the core insurance and core banking projects.

Revenues in Telecom & Media vertical has increased by +2% in local currency, or -9% in

reported figures.

The impact of currency deprecations in several countries in Latam is more relevant in this

vertical than in others (especially in Venezuela and Brazil), due to the higher weight of

revenues from these geographies (c.40%) in this vertical.

The levels of activity in Latam are negatively affected by the weak macro backdrop, while

the levels of activity in Europe have been affected by the repositioning of its international

footprint of one of our top clients in the area.

Energy & Industry

Financial Services

Telecom & Media


The activity in Public Administrations & Healthcare has registered a +7% growth in local

currency, equivalent of a +5% in reported terms.

Despite the slowdown of the activity in the Healthcare segment, Spain has registered

positive growth rates and enjoyed a greater dynamism than in previous years.

Latam maintains a positive performance with growth rates close to double digit in local

currency.

The levels of activity in AMEA have been positively affected by the project to support the

census process and voting systems in Iraq.

The double digit growth rate registered in the order intake of the area in 2014 points to a

very positive evolution of the vertical in 2015.

Sales in Transport & Traffic vertical have increased by +5% in local currency or +1% growth

in reported terms.

Despite the fact that Indra has been awarded with several high speed train projects in Spain

during the second half of the year, the activity in the area remains affected by due to the

budgetary restrictions that are facing the public entities related with the management of the

infrastructure programs in Spain, especially air traffic authorities.

Europe and Latam have registered very relevant growth rates in both railway and terrestrial

transport systems and maritime traffic management systems.

The performance of AMEA has been affected by the finalization during the year of specific

projects of air traffic management systems in Oman and India.

The prospects for 2015 are very positive as the company has been awarded by large

contracts in the Middle East and Asia.

Revenues in Security & Defence vertical has increased by +3% in local currency, or +3% in

reported terms.

The level of activity in Spain remains under pressure (-5%), although at a slower pace than in

previous years (with sales declining >25% in 2013, for example), affected by delays in

certain specific technology projects for Ministry of Defence that will probably have a very

positive contribution in the coming quarters.

AMEA has registered very positive growth figures (+30%), and already represents more than

13% of the revenues of the vertical. Europe & North America (60% of the sales of the

vertical) are also posting very positive figures. Order intake has increased vigorously in 2014

in AMEA.

We expect relevant growth rates in revenues to continue in the future backed by the solid

backlog accumulated throughout 2014.

Public Administrations & Healthcare

Transport & Traffic

Security & Defence


16%

17%

11%18%

21%

17%

Transport &

Traffic

Security & Defence Energy &

Industry

Public Administrations & Healthcare

Telecom &

Media

Financial

Services


5. ANALYSIS BY GEOGRAPHY

REVENUES


€M % €M % Reported Local

Currency

Spain 1,147 39 1,125 39 2 2

Latam 804 27 831 29 (3) 10

Europe & North America 612 21 577 20 6 7

Asia, Middle East&Africa 375 13 381 13 (2) (0)

TOTAL 2,938 100 2,914 100 1 5

The performance of the activity in the Spanish market accumulates two consecutive quarters

of positive evolution. Thus, total revenues in 2014 increased by +2% in 2014 (flat excluding

the consolidation of the temporary joint enterprises in 4Q14) which implies a significant

improvement versus previous years (-11% in 2013 and -18% in 2012).

The recovery has been leaded by the Public Sector, which shows a meaningful recovery in

2014 (+6%) versus the poor track record of the last years (with yearly annual drops

exceeding 20% in the last years).

In the Private Sector persist the weak demand (with a slightly negative performance) and the

bias towards Services versus Solutions projects.

The gradual recovery of the activity in the Public Sector might have a slowdown phase in the

coming quarters as a result of the Regional and General Elections calendar for 2015.

Book to bill ratio (0,90x) has been similar to the one registered in 2013 (0,92x).

By verticals, Financial Services and Public Administrations are the verticals registering higher

growth rates in 2014, while Transport & Traffic and Security & Defence are the ones

delivering a better performance in the second half of the year.

The activity in Latam (sales+10% in local currency) has been affected by the depreciation of

the majority of the currencies of the area (especially in Argentina and Venezuela), which

implies a drop in revenues of -3% in euros.

Macro headwinds and the political backdrop in some countries (especially in Brazil) have

negatively affected the activity in the area. However, verticals such as Transport & Traffic

and Energy & Industry have delivered growth rates above +20% in local currencies.

Despite the weak macro backdrop (especially in Brazil) the activity has performed positively

in the four quarter (+12% in local currency), especially in verticals such as Transport & Traffic

and Energy & Industry.

Order intake has been above sales (book to bill ratio of 1,2x, above the 1,1x registered in

9M14 and in line with the 1,2x achieved in 2013).

By countries, Mexico and Colombia have registered double digit growth rates in local

currency.

Spain

Latam


Revenues in Asia, Middle East & Africa (AMEA) are similar to the ones delivered in 2013 in

local currency (-2% in reported terms).

It is worth mentioning the favorable performance of the verticals of Security & Defence,

Public Administrations and Energy & Industry.

During the year the company has ended the execution of certain large contracts in the area,

affecting the performance of the region throughout the year.

Order intake has registered a positive performance (+10% in local currency), reaching a book

to bill ratio above 1,3x (versus 1,2x in 2013).

The activity in Europe & North America has increased by +7% in local currency (+6% in

reported figures), registering a certain slowdown in the second half of the year in line with

our previously reported indications.

Security & Defence and Transport & Traffic represent the majority of the activity in the area.

We would like to highlight the positive performance of Germany, Italy, Belgium, Norway and

Turkey, as well as the favorable evolution of certain countries in the East of Europe.

Asia, Middle East & Africa (AMEA)

Europe & North America


6. ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS (IFRS)

INCOME STATEMENT

Revenues were €2,938m, increasing by +5% in local currency. Revenues in reported terms

(in euros) have increased slightly (+1%).

Contribution margin (14.3%), decreased -0.7 pp versus 2013:

Contribution margin in Solutions (16.0%) has decreased -0.6 pp versus the same

period of the previous year, mainly due to the slowdown of the activity in Latam and

the short term commercial investment that requires the international expansion

(especially in AMEA).

Contribution margin in Services was 11.2%, -0.7 pp lower versus 2013, as pricing

pressure in some verticals and geographies (mainly in Spain and Latam) continues.

D&A reached €64m versus €52m in 2013 as a result of the R&D subsidies recognition and

amortization commented in previous earnings report. Excluding this impact, D&A is

expected to be similar to the one registered in 2013.

Recurrent operating profit (EBIT before non recurring items) accounted for €204m,

slightly below 2013 one (€226m), and the recurrent EBIT margin in 6.9%.

During the fourth quarter the company has included non recurring items affecting the

EBIT level by a gross amount of €294m that net of the reversion of provisions totaled

€246m, which we will explain in detail in the flowing pages. After these adjustments,

EBIT for 2014 reached -€42m.

Net financial expenses were €54m compared to €64m in 2013, thanks to the

optimization of Indra’s financial resources, and other financial costs, with no impact of

cash.

Share of profits of associates and other investees reached -€0.2m versus €12m in 2013,

which included the disposal of Indra’s 12.77% stake in Banco Inversis S.A. (“Inversis”), with

capital gains of approximately €15m before taxes.

Tax rate stood at 29% once excluded the non recurring items (versus 20.4% in 2013),

reflecting the lack of usage of the tax credits in Brazil.

Attributable (recurrent) profit (excluding non recurring items) reached €104m, decreasing

by -24% versus 2013.

Net Profit reached -€92m, negatively affected by the total gross non recurring items

totaled €313m.


NON RECURRING EFFECTS

A number of non recurring items have been registered during the fourth quarter for a total

gross amount, before reversal of provisions, of €313m, due to changes in estimates

resulting from several factors and events that have taken place in the last part of 2014

and beginning of 2015. The summary of such items is:

Concept (€M)

Provisions, impairments y over-runs -231

Impairment of Goodwill -21

Impairment of Tax credit -19

Impairment of Intangible assets -19

Efficiency improvement costs -17

Other -6

Total before provisions reversal -313

Provisions reversal 48

Total after provisions reversal -265

The non recurring items, for a gross amount of €313m, are netted by the reversion of two

provisions for a total of €48m (€24m of project risk provisions and €24m of personnel

provisions) which are foreseen not to be used, resulting in a net figure of €265m.

These €265m of after provisions reversals non-recurring items have a negative impact of

€246m in EBIT (with the remaining €19m impacting directly the tax charge).

Provisions, impairments & over-runs

Corresponds to provisions, impairments & over-runs from programs delays, re-

programming and cancelations, as well as change in estimates due to events or court

situations that took place in the last part of 2014 and beginning of 2015. The

breakdown is as follows:

Vertical Market (€M)

Energy & Industry -26

Financial Services -26

Telecom & Media -3

Public Administrations -50

Transport & Traffic -61

Security & Defence -65

Total provisions, impairments and over-runs -231

Goodwill Impairment

As part of the ordinary review of the business plans used for the assessment of the

goodwill of the different businesses of the Group, new hypothesis on the business

that reflect the macro situation and the new market conditions have been considered

in order to realize new estimates over the business in Brazil and Indra Business

Consulting.

As a result of the above, there has been an impairment of €21m:

Brazil: €17m (€85m after the impairment

Indra Business Consulting: €-4m (€24m after the impairment)


Fixed Asset Impairment

As part of the annual ordinary review of the business plans associated with the main

intangible assets (capitalized R&D), new estimates have been considered regarding a

specific asset.

The application of this new scenario required an impairment of €19m.

Tax Credit Impairment

Although the tax losses carry forwards do not expire in Brazil (but only 30% of the

earnings before tax can be used as a base for compensation), only has been

considered as an asset those carry forwards that are considered to be used according

to the updated business plan (€34m), registering for this reason an impairment of

€19m.

The breakdown by nature of the non-recurring items is the following:

(M €)

Inventories -139

Clients -65

Fixed Intangible Assets -19

Goodwill -21

Other -3

Non-recurring items to EBIT after prov. rever. -246

Provisions reversals 48

Non-recurring items to EBIT before prov. rever. -294

Tax credit impairment -19

Total non-recurring items -313

The company believes that these non-recurring items reflect the current impact from the changing

market conditions suffered by Indra in 2014 and the changes in estimates coming from new

circumstances (and hypothesis) and last available information.


BALANCE SHEET AND CASH FLOW STATEMENT

By the end of the year, net working capital stood at 106 days of equivalent LTM

revenues, excluding the impact of non-recurring items.

Indra invested €42m in Intangible assets (net of subsidies), slightly below the €46m of

last year.

Payments for tangible assets reached €15m, versus €10m recorded in 2013.

Financial investments amounted to €13m (net of divestments and the consolidation

impact of the joint business units).

Free cash flow during the period was €47m, versus the €27m of last year (adjusted for

the divestment previously mentioned).

Net debt position at the end of 2014 amounted to €663m (€622m in 2013), equivalent

to 2.5x LTM recurrent EBITDA.

In 2014 the balance of the non-recourse factoring lines amounted to €187m.


HUMAN RESOURCES

The total workforce at the close of 2014 stood at 39,130 employees, +2% up on 2013. It is

worth noting the increase of resources in AMEA (+19%) in line with the higher number of

professionals in Philippines due to the development strategy carried out in an offshore

factory in the country as well as the higher needs of resources in the north of Africa.

It is worth to highlight the decrease of the workforce in Latam as a result of the finalization

of certain projects intensive in terms of personnel, and in line with the strategy of increasing

the number of value added projects.

Final Workforce 2014 % 2013 % Variation

%

Spain 21,461 55 20,702 54 4

Latam 14,388 37 14,893 39 -3

Europe & North America 1,788 5 1,694 4 6

Asia, Middle East & Africa 1,493 4 1,259 3 19

TOTAL 39,130 100 38,548 100 2


7. OTHER EVENTS OVER THE PERIOD

There were no other events over the period to be highlighted


8. EVENTS FOLLOWING THE CLOSE OF THE PERIOD

On January 29th 2015 Indra reported to the Spanish Stock Exchange Commission (CNMV) that

in the session held that date with the previous report of the Nomination, Remuneration and

Corporate Governance Committee, the Board of Directors adopted by unanimity the following

agreements, considered as extraordinary items in the agenda at the request of several

proprietary directors:

1.- To appoint Mr. Fernando Abril-Martorell Hernández through cooptation procedure.

2.- To accept Mr. Javier Monzón de Cáceres resignation, presented at the request of the

Board of Directors following the revocation of his executive powers.

3.- To appoint Mr. Abril-Martorell as Chairman of the Board of Directors and member of the

Strategy Committee, with executive character.

4.- To nominate Mr. Javier Monzón as Honorary President, in recognition of his

contribution to the Company.


ANNEX 1: CONSOLIDATED INCOME STATEMENT

2014 2013 Variation

€M €M €M %

Revenues 2,937.9 2,914.1 23.8 1

Other income 93.3 75.1 18.2 24

Materials consumed and other operating

expenses (1,353.5) (1,333.0) (20.4) 2

Personnel expenses (1,405.5) (1,453.5) 48.0 (3)

Other results (4.1) 75.5 (79.6) NA

Gross Operating Profit (recurrent

EBITDA) 268.2 278.1 (9.9) (4)

Depreciations (64.2) (51.9) (12.3) 24

Recurrent Operating Profit (EBIT

before non recurring items) 203.9 226.2 (22.3) (10)

Recurrent EBIT margin (before non recurring items

6.9% 7.8% (0.9) --

Non recurring Items (246.4) (27.9) (218.5) 783

Net Operating Profit (EBIT) (42.5) 198.3 (240.8) (121)

EBIT Margin -1.4% 6.8% (8.3) --

Financial results (54.3) (64.0) 9.7 (15)

Share of profits (losses) of associates and

other investees (0.2) 12.4 (12.6) NA

Earnings Before Taxes (97.0) 146.7 (243.7) (166)

Income tax expenses 6.6 (30.0) 36.6 (122)

Profit for the period (90.4) 116.7 (207.1) (177)

Attributable to minority interests (1.5) (0.9) (0.6) NA

Net Profit (91.9) 115.8 (207.7) (179)

Net Profit recurrent 104.3 138.0 (33.8) (24)

Figures not audited


ANNEX 2: INCOME STATEMENTS BY SEGMENTS

1. Solutions

2014 2013 Variation

€M €M €M %

Net sales 1,887 1,888 (1) -0

Contribution margin 303 314 (12) -4

Contribution margin/ Net revenues 16.0% 16.6% (0.6) pp

Results from associates 0 1 (0) --

Segment result 303 315 (12) -4

2. Services

2014 2013 Variation

€M €M €M %

Net sales 1,051 1,026 25 2

Contribution margin 118 123 (5) -4

Contribution margin/ Net revenues 11.2% 11.9% (0.7) pp

Results from associates (4) 0 (4) --

Segment result 114 123 (8) -7

3. Total consolidated

2014 2013 Variation

€M €M €M %

Revenues 2,938 2,914 24 1

Consolidated contribution margin 421 437 (16) -4

Contribution margin/ Revenues 14.3% 15.0% (0.7) pp

Other non-distributable corporate expenses (217) (211) (6) 3

Recurrent operating profit (EBIT before non

recurring items)

204 226 (22) -10

Non recurring Items (246) (28) (219) 783

Net operating profit (EBIT) (42) 198 (241) -121

Figures not audited


ANNEX 3: CONSOLIDATED BALANCE SHEET

2014 2013 Variation

€M €M €M

Property, plant and equipment 127.3 144.1 (16.8)

Intangible assets 289.8 285.9 3.9

Investments in associates and other

investments 89.5 79.5 10.1

Goodwill 583.3 605.9 (22.7)

Deferred tax assets 116.0 87.1 28.9

Non-current assets 1,206.1 1,202.6 3.5

Non-current net assets held for sale 7.7 7.6 0.1

Operating current assets 1,841.2 2,059.8 (218.7)

Other current assets 132.5 143.9 (11.3)

Cash and cash equivalents 293.9 363.1 (69.2)

Current assets 2,275.2 2,574.4 (299.1)

TOTAL ASSETS 3,481.3 3,776.9 (295.7)

Share Capital and Reserves 942.5 1,125.2 (182.7)

Treasury stock (1.6) (1.3) (0.4)

Equity attributable to parent

company 940.9 1,124.0 (183.1)

Minority interests 12.7 10.7 2.0

TOTAL EQUITY 953.6 1,134.7 (181.1)

Provisions for liabilities and charges 40.4 99.3 (58.9)

Long term borrowings 825.7 789.9 35.9

Other financial liabilities 8.9 4.0 4.9

Deferred tax liabilities 1.8 16.1 (14.3)

Other non-current liabilities 35.0 40.0 (5.0)

Non-current liabilities 911.9 949.3 (37.4)

Current borrowings 130.9 195.7 (64.8)

Operating current liabilities 1,193.0 1,191.4 1.6

Other current liabilities 292.0 305.8 (13.8)

Current liabilities 1,615.8 1,692.9 (77.1)

TOTAL EQUITY AND LIABILITIES 3,481.3 3,776.9 (295.6)

Net debt 662.7 622.5 40.3

Figures not audited


ANNEX 4: CONSOLIDATED CASH FLOW STATEMENT

2014 2013 Variation

€M €M €M

Profit before taxes (97.0) 146.7 (243.7)

Adjusted for:

- Depreciations 64.2 51.9 12.3

- Provisions, capital grants and others 199.5 (9.6) 209.2

- Share of profit / (losses) of associates and other

investees 3.3 (0.7) 4.0

- Net financial result 49.5 60.3 (10.8)

- Dividens received 0.4 1.1 (0.7)

Operating cash-flow prior to changes in

working capital 220.0 249.7 (29.7)

Receivables, net (45.0) 35.0 (80.0)

Inventories, net 46.7 0.7 46.0

Payables, net 14.9 (70.4) 85.3

Change in working capital 16.7 (34.6) 51.3

Other operating changes (44.3) (28.0) (16.3)

Income taxes paid (52.6) (34.9) (17.7)

Cash-flow from operating activities 139.8 152.2 (12.4)

Tangible, net (14.9) (9.9) (5.0)

Intangible, net (41.8) (46.3) 4.5

Investments, net (12.9) (14.1) 1.2

Interest received 4.9 4.4 0.5

Net cash-flow provided/(used) by investing

activities (64.7) (65.9) 1.2

Changes in treasury stock (6.9) (2.5) (4.4)

Dividends of subsidiaries paid to minority interests (0.2) (0.2) (0.0)

Dividends of the parent company (55.6) (55.8) 0.2

Short term financial investment variation 2.2 (1.5) 3.7

Increases (repayment) in capital grants 5.3 3.4 2.0

Increase (decrease) in borrowings (44.3) 319.2 (363.5)

Interest paid (46.2) (51.6) 5.4

Cash-flow provided/(used) by financing

activities (145.7) 210.9 (356.7)

NET CHANGE IN CASH AND CASH EQUIVALENTS (70.6) 297.2 (367.8)

Cash & cash equivalents at the beginning of the

period 363.1 69.8 293.2

Foreign exchange differences 1.4 (4.0) 5.4

Net change in cash and cash equivalents (70.6) 297.2 (367.8)

Cash & cash equivalents at the end of the

period 293.8 363.1 (69.2)

Long term and current borrowings (956.6) (985.5) 28.9

Net debt/ (cash) position 662.7 622.5 40.3

Free Cash Flow (1) 47.1 52.1 -5.0 (1) Free cash flow is defined as cash generated before dividend payment, net financial investments and similar payments, and investment in treasury stock

Figures not audited


DISCLAIMER

This report may contain certain forward-looking statements, expectations and forecasts about the

Company at the time of its elaboration. These expectations and forecasts are not in themselves

guarantees of future performance as they are subject to risks, uncertainties and other important

factors that could result in final results differing from those contained in these statements.

This should be taken into account by all individuals or institutions to whom this report is

addressed and that might have to take decisions or form or transmit opinions relating to securities

issued by the Company, and in particular, by the analysts and investors who consult this

document.


INVESTOR RELATIONS

Javier Marín de la Plaza, CFA

phone: 91.480.98.04

[email protected]

Manuel Lorente

phone: 91.480.98.74

[email protected]

Rubén Gómez

phone: 91.480.98.00

[email protected]

Enrique Millán

phone: 91.480.57.66

[email protected]

Paloma Pelletán

phone: 91.480.98.05

[email protected]

SHAREHOLDER OFFICE

91.480.98.00

[email protected]

INDRA

Avda. Bruselas 35

28108 Madrid

www.indra.es

mailto:[email protected]

mailto:[email protected]

http://www.indra.es/

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